Key Points
- Governor Hochul signed the RAISE Act to regulate large AI developers.
- Companies must report any AI safety incidents within 72 hours. The law lowered maximum fines from $30 million to $3 million.
- A new state office will monitor AI safety and release annual reports.
- Federal plans for a national AI standard may conflict with New York’s law.
New York Governor Kathy Hochul signed the RAISE Act on Friday, a move that places new demands on big companies developing artificial intelligence. This law focuses on safety and transparency. From now on, developers must disclose to the public exactly how they prevent their AI models from causing harm. If an AI system experiences a serious glitch or a safety incident, the company must report it to the state within 72 hours.
New York is the latest state to take a stand on tech regulation, following California’s lead from earlier this year. However, the final version of the RAISE Act is a bit more business-friendly than the version lawmakers first proposed in June. Initially, the bill proposed substantial fines—up to $10 million for a first offense and $30 million for subsequent offenses.
Governor Hochul scaled those numbers back significantly. Under the final law, a first violation carries a maximum fine of $1 million, while repeated problems can cost up to $3 million.
To ensure companies comply with these rules, the state is establishing a new oversight office. This team will work under the Department of Financial Services. Their main job is to monitor the leading AI creators and produce an annual report on whether the industry is staying safe and honest.
This isn’t the only AI law New York passed recently. Just a few weeks ago, the governor signed two other bills meant to protect people in the entertainment world from AI-generated content.
But New York’s efforts might soon face a challenge from Washington, D.C. President Trump has criticized states for creating their own “patchwork” of different laws. He recently signed an executive order calling for a single national standard that is less burdensome for tech companies. He argues that excessive state-level regulation could erode America’s lead in the global AI race.
For now, large tech companies in New York will need to adjust to increased paperwork and state inspections as this new law takes effect.
